Electric vehicle sales are a surprising beneficiary of the Trump presidency – at least outside of the United States.
The Iran conflict caused global oil prices to surge above $100 per barrel in March, April, and May of this year. Gasoline prices soon followed suit, exceeding $4 per gallon in the United States most days since April Fools’ Day.
As the biggest consumer of oil from the Middle East, Asia was hit hardest by its rising prices, shortages, and restrictions. But China’s measures to cut back on its oil imports have prevented global oil prices from escalating as high as many experts predicted.
Electric vehicles are one contributing factor. A recent analysis estimated that China’s rapid adoption of EVs has reduced the country’s oil consumption by 1.5 million barrels per day, or nearly 10%.
A new global electric car market report from the International Energy Agency, or IEA, also concluded that the Iran conflict and associated energy crisis “has clearly reinforced the case for EVs as a way to address energy security and fuel cost concerns,” and that it “may therefore further accelerate ongoing shifts in global car markets towards more electrification.”
The share of global new car sales that are electrified – meaning both fully electric vehicles and plug-in hybrids – has grown steadily in recent years, according to the IEA. In 2020, EVs represented under 5% of global new car sales. That share rose rapidly to 20% in 2024 and reached one-in-four new cars sold last year.
A slump followed by renewed interest
EV policies in China and the U.S. are a big deal, because 38% of all cars sold in 2025 were purchased in China and another 18% in the United States.
“China and the U.S. are such big markets in absolute terms that they shape the global picture,” explained Euan Graham, senior analyst at the energy think tank Ember, in an email.
As an example, EV sales abruptly slumped during the first two months of 2026, after Republicans eliminated the U.S. federal EV tax credit and China slashed its EV tax exemption.
But on the last day of February, the U.S. and Israel launched coordinated military strikes against Iran, which responded by shutting down the Strait of Hormuz, through which 20% of the global oil supply previously flowed.
The price of oil and refined fuels spiked, and interest in EVs followed. Since March, electric car sales have surged in Europe, Southeast Asia, Latin America, and Asia Pacific. In Europe, the world’s third-largest auto market, EVs now represent nearly 30% of new car sales. Their popularity has even begun to rebound in China and the U.S.
As to just how much the Iran conflict supercharged EV sales, “I think it’s a bit tricky to nail down precisely,” said Elizabeth Connelly, energy technology and transport analyst at IEA and co-author of the report, in an email.
That’s because individual countries’ policies and economic conditions have a big influence on consumer behavior. But the data certainly indicate that the war and resulting high fuel prices made EVs more appealing to consumers.
For example, the IEA report noted that in China, total car sales have declined this year due largely to an economic slowdown in the country. That slump has hit internal combustion engine car sales particularly hard. While the EV share fell to 42% of China’s new car sales in the first two months of the year when government subsidies were first slashed, it quickly rebounded after the Iran conflict began. Electrified vehicles set records by exceeding 60% of China’s reduced volume of new car sales in each of the past three months.
That makes the United States’ persistently stagnant EV market unique.
“As some markets see a step change in EV sales this year, boosted by the conflict in Iran, the U.S. is seeing sales slump having rolled back policy support,” Graham said.
Electrified vehicles have represented under 7.5% of new American car sales in each of the 10 months since federal tax credits were eliminated. Although rising gasoline prices spurred record domestic purchases of hybrid cars and used EVs, new EVs have not experienced the same sales boost.
Read: The rest of the world is lapping the U.S. in the EV race
The future of the car market is electric, to China’s benefit
As China’s domestic car sales have slowed this year, the country’s automakers have responded by ramping up their vehicle exports. That’s especially true of EVs, which the IEA reports surged to 35% of Chinese car exports in 2025 and 45% in the first half of 2026.
And the IEA data illustrates that fossil-fueled cars are quickly going the way of the dinosaurs. Global internal combustion engine vehicle sales reached their apex in 2017. The COVID pandemic caused car sales to plummet, and although they have now rebounded to pre-pandemic levels, all of the post-pandemic sales recovery has come from EVs. Fewer cars with internal combustion engines are being sold around the world today than were in 2011.
And a recent forecast by JD Power predicted that EVs will comprise a majority of new global car sales by 2033, reaching over 80% of the new car market by 2040.
The IEA is a bit less optimistic in its EV sales forecasts.
“Our two policy-based scenarios project around a 50% electric car sales share by 2035,” Connelly said.
The IEA is particularly bearish about the U.S., expecting no more than 20% of new American car sales to be electrified by 2035 unless new policies are introduced.
“The changes in U.S. policy over the past two years have pulled down the projected global EV sales share,” Connelly said. “That being said, there is upside potential to our outlook based on the progress seen in emerging markets and developing economies, and more broadly depending on how policymakers respond to the recent energy crisis.”
Chinese automakers dominate the electrified sector, accounting for about two-thirds of all global EV sales today. Expanding Chinese EV exports have contributed to rapidly growing electric car adoption in countries around the world, including Brazil, Argentina, Mexico, Australia, New Zealand, Indonesia, Thailand, Vietnam, the Philippines, Belgium, the United Kingdom, United Arab Emirates, Russia, and Ethiopia. In total, the IEA reports that 50 countries set records for EV sales in the second quarter of 2026.
Can American automakers survive?
The rapid global transition to EVs and the Chinese dominance of that market have American automakers frightened about their companies’ futures. Recent U.S. government policies and regulatory rollbacks have undercut an already weak domestic EV market, and with the exception of Tesla, American automakers have been unable to compete with Chinese EVs in the international market.
There remain a few glimmers of hope in the American EV market. California, which accounts for one-quarter to one-third of annual electrified vehicle sales in the country, just launched its own rebate program for first-time EV buyers. And American legacy automakers like Ford and newcomers like Slate are taking innovative approaches in an effort to introduce more affordable electric vehicles.
But unless those efforts achieve success soon, the formerly dominant American auto industry will be relegated to fighting over the scraps of an ever-shrinking internal combustion engine vehicle market as the world transitions to an electrified future, unintentionally supercharged by the consequences of Trump’s Iran war.
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